India's soyabean output is set to rise this year after good early monsoon rains prompted farmers to plant more of the oilseed in June and July, helping the world's top vegetable oil importer cut overseas purchases of the cooking ingredient. Indians use around 18-19 million tonnes of edible oil for curries and fried food, but about three quarters of this demand is met by cheap imports, especially from Malaysia and Indonesia, making it the south Asian nation's biggest overseas spend behind crude oil and gold.
Local soyabean production fell nearly 23 percent to 6.9 million tonnes in 2015/16 as two successive droughts shrivelled crops and dried out the soil, spurring oil refiners to step up imports.
Shipments of vegetable oils during the first nine months of the oil year that began on November 1 rose 5 percent on a year earlier to 10.9 million tonnes But an above-average monsoon this year could cap imports as acreage of the oilseed rises and yield per hectare is expected to be higher. "With a good monsoon, we can expect a production of 9 to 10 million tonnes, but let's keep our fingers crossed," said B.V. Mehta, head of Mumbai-based trade body, Solvent Extractors' Association.
Farmers have planted soyabean on 11.24 million hectares so far in the sowing season that began in June, up 0.3 percent over the past year, according to the latest data from India's farm ministry. Acreage has dropped in the top producing central state of Madhya Pradesh as some farmers have switched to more lucrative lentils, but planting is 12 percent higher in the country's second largest producing Maharashtra state.
However, any loss in acreage is expected to be more than compensated by a higher yield, said Mehta. In Madhya Pradesh, farmer Girish Badli expects his annual soyabean output to double to 27,000 kg (59,500 lb) even though he has planted the oilseed on 60 hectares, 16 percent less land than last year.
"The climate has been very favourable for the crop," said Badli, who farms in a village 150 km (93 miles) south-west of the state capital Bhopal. "Soyabean flowering is twice as good as last year." Consumption of cooking oils in India has tripled over the last two decades as the population grows and incomes surge, but output has risen by less than a third. Prices of soyabean, which have fallen 10 percent in the past two years, remain a concern for farmers and trade bodies, which are lobbying for a higher rate of taxes on the import of crude and refined vegetable oils.